Snapchat

Adults, not teens. Messaging, not Stories. Developing markets, not the US. These are how Snapchat will make a comeback, according to CEO Evan Spiegel . In a 6,000-word internal memo from late September leaked to Cheddar’s Alex Heath, Spiegel attempts to revive employee morale with philosophy, tactics, and contrition as Snap’s share price sinks to an all-time low of around $8 — half its IPO price and a third of its peak.

“The biggest mistake we made with our redesign was compromising our core product value of being the fastest way to communicate” Spiegel stresses throughout the memo regarding ‘Project Cheetah’. It’s the chat that made Snapchat special, and burying it within a combined feed with Stories and failing to build a quick-loading Android app have had disastrous consequences.

Spiegel shows great maturity here, admitting to impatient strategic moves and outlining a cohesive path forward. There’s no talk of Snapchat ruling the social app world here. He seems to understand that’s likely out of reach in the face of Instagram’s competitive onslaught. Instead, Snapchat is satisfied if it can help us express ourselves while finally reaching even meager profitability.

Snapchat may be too perceived as a toy to win enough adults, too late to win back international markets from the Facebook empire, and too copyable by good-enough alternatives to grow truly massive. But if Snap can follow the Spiegel game-plan, it could carve out a sustainable market through a small but loyal audience who want to communicate through imagery.

Here are the most interesting takeaways from the memo and why they’re important:

1. Apologizing For Rushing The Redesign

“There were, of course, some downsides to moving as quickly as a cheetah We rushed our redesign, solving one problem but creating many others . . . Unfortunately, we didn’t give ourselves enough time to continue iterating and testing the redesign with a smaller percentage of our community. As a result, we had to continue our iterations after we launched, causing a lot of frustration for our community.”

Spiegel always went on his gut rather than relying on user data like Facebook. Aging further and further away from his core audience, he misread what teens cared about. The appealing buzz phrase of “separating social from media” also meant merging messaging and Stories into a chaotic list that made both tougher to use. Spiegel seems to have learned a valuable lessen about the importance of A/B testing.

2. Chat Is King

“Our redesigned algorithmic Friend Feed made it harder to find the right people to talk to, and moving too quickly meant that we didn’t have time to optimize the Friend Feed for fast performance. We slowed down our product and eroded our core product value. . . . Regrettably, we didn’t understand at the time that the biggest problem with our redesign wasn’t the frustration from influencers – it was the frustration from members of our community who felt like it was harder to communicate . . . In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate.”

When Snap first revealed the changes, we predicted that “Teen Snap addicts might complain that the redesign is confusing, jumbling all content from friends together.” That made it too annoying to dig out your friends to send them messages, and Snap’s growth rate imploded, with it losing 3 million users last quarter. Expect Snap to optimize its engineering to make messages quicker to send and receive, and it even sacrifice some of its bells and whistles to make chat faster in developing markets.

3. Snapchat Must Beat Facebook At Best Friends

“Your top friend in a given week contributes 25% of Snap send volume. By the time you get to 18 friends, each incremental friend contributes less than 1% of total Snap send volume each. Finding best friends is a different problem than finding more friends, so we need to think about new ways to help people find the friends they care most about.”

Facebook’s biggest structural disadvantage is its broad friend graph that’s bloated to include family, co-workers, bosses, and distant acquaintances. That might be fine in a feed app, but not for Stories and messaging where you only care about your closest friends. With friend lists and more, Facebook has tried and failed for a decade to find better ways to communicate with your besties. This is the wedge through which Snapchat can attack Facebook. If it develops special features for luring your best friends onto the app and staying in touch with them for better reasons than just maintaining a Snap “Streak”, it could hit Facebook where it can’t defend itself.

4. Discover Soars As Facebook Watch And IGTV Stumble

“Our Shows continue to attract more and more viewers, with over 18 Shows reaching monthly audiences of over 10M unique viewers. 12 of which are Original productions. As a platform overall, we’ve grown the amount of total time spent engaging with our Shows product, almost tripling since the beginning of the year. Our audience for Publisher Stories has increased over 20% YoY, and we believe there is a significant opportunity to continue growing the number of people who engage with Discover content . . .We are also working to identify content that is performing well outside of Snapchat so that we can bring it into Discover. “

Discover remains Snapchat’s biggest differentiator, scoring with premium video content purposefully made for mobile. What it really needs, though, are a few must-see tentpole shows to drag in a wider audience that can get hooked on the reimagined digital magazine experience.

5. But Discover Is A Mess

“Our content team is working hard to experiment with new layouts and content types in the wake of our redesign to drive increased engagement.”

Snapchat Discover is an overcrowded pile of clickbait. News outlets, social media influencers, original video Shows, and aggregated user content collections all battle for attention in a design that feels overwhelming to the point of exhaustion. Thankfully Snapchat seems to recognize that more cohesive sorting with fewer images and headlines bombarding you might make Discover a more pleasant lean-back consumption experience.

6. Aging Up To Earn Money

“Most of the incremental growth in our core markets like the US, UK, and France will have to come from older users who generate higher average revenue per user . . . Growing in older demographics will require us to mature our application . . . Many older users today see Snapchat as frivolous or a waste of time because they think Snapchat is social media rather than a faster way to communicate. Changing the design language of our product and improving our marketing and communications around Snapchat will help users understand our value . . . aging-up our community in core markets will also help the media, advertisers, and Wall Street understand Snapchat.”

Snapchat can’t just be for cool kids anymore. Their lower buying power and lifestage make them less appealing to brands. The problem is that Snapchat risks turning off younger users by courting their older siblings or adults. If, like Facebook, users start to feel like Snapchat is a place for parents, they may defect in search of the next purposefully built to confuse adults to stay hip.

7. Finally Prioritizing Developing Markets

“We already have many projects underway to unlock our core product value in new markets. Mushroom allows our community to use Snapchat on lower-end devices. Arroyo, our new gateway architecture, will speed up messaging and many other services . . . It might require us to change our products for different markets where some of our value-add features detract from our core product value”

Sources tell me Snapchat’s future depends on the engineering overhaul of its Android app, a project codenamed ‘Mushroom’. Slow video load times and bugs have made Snapchat practically unusable on low-bandwidth connections and old Android phones in the developing world. The company concentrated on the US and other first-world markets, leaving the door open for copycats of Stories built by Instagram (400 million daily users) and WhatsApp (450 million daily users) to invade the developing world and dwarf Snap’s 188 million total daily users. In hopes of a smooth rollout, Snapchat is already testing Mushroom, but it will have to do a ton of marketing outreach to convince frustrated users who ditched the app to give it another try.

8. Fresh Ideas, Separate Apps

“We’re currently building software that takes the millions of Snaps submitted to Our Story and reconstructs parts of the world in 3D. We can then build augmented reality experiences on top of those models and distribute them as Lenses . . . If our innovation compromises our core product of being the fastest way to communicate, we should consider create [sic] separate applications or other ways of delivering our innovation.”

Snapchat has big plans for augmented reality. It doesn’t just want to stick animations over the top of anywhere, or create AR art installations in a few big cities. It wants to build site-specific AR experiences across the globe. And while everything the company has built to date has lived inside of Snapchat, it’s willing to spawn standalone apps if necessary so that it doesn’t bog down its messaging service. That could give Snapchat a lot more leeway to experiment.

9. The Freedom Of Profitability

“Our 2019 stretch output goal will be an acceleration in revenue growth and full year free cash flow and profitability. With profitability comes increased autonomy and freedom to operate our business in the long term best interest of our community without the pressure of needing to raise additional capital.”

It’s been four years since Snapchat launched Snapcash. In November 2014, Snapchat announced a partnership with mobile payments service Square to introduce the feature that lets you transfer money between accounts on the content sharing platform.

The feature has been available to Snapchat users using both Android and iOS in the United States who have a debit card and are 18 or older. Read more…

As witnessed in the Snappables trailer, you can fight aliens in an Space Invaders-style game by moving your head around, or pump iron at the gym with your eyebrows. You can also invite friends on Snapchat to play along in multiplayer games.

There are very few of us with the confidence to play Snappables in public, but at least Snap is encouraging you to try. Read more…

First previewed last fall during Apple’s iPhone X launch event, Snap specially designed the lenses to take advantage of the face-tracking abilities of the iPhone X’s TrueDepth camera. What this means for you, a selfie-obsessed Snapchat user, is that the new lenses will be better able to “stick” to your face, making them look slightly more realistic (or, as “realistic” as a brightly-colored mask can look, anyway). Read more…

Snapchat’s parent company bought a web-based 3D game engine startup out of the UK this past May, Business Insider (paywalled) reports.

PlayCanvas is a development tool focused on letting people easily design rich 3D environments. Unlike products from companies like Unity and Epic Games, PlayCanvas’s game engine was entirely browser-based and was optimized to run on low-power devices. The focus of the WebGL engine stretches from configuring 3D models to running entire games.

The small London-based company was founded in 2011 and raised just $590,000 in seed funding from investors including the Microsoft Accelerator and DC Thomson Ventures according to Crunchbase. We don’t know how much the deal went for.

While many of Snap’s recent acquisitions have focused on bolstering consumer-facing features, PlayCanvas seems to be focused squarely on developers. The most obvious use of a tool would have been to integrate the technology into Snap’s Lens Studio product where developers can build their own AR Lens effects. Snap has recently been drawing more attention to third-party AR creations, and it’s clear that if the company wants to reach any sort of scale in its augmented reality plans, it’s going to have to hand over the reigns to a developer network.

It’s been a while since we heard from Snow, the Snapchat clone app in Asia that Facebook once tried to buy, but today the company behind it has scooped up a $50 million investment from SoftBank and Sequoia China.
Snow was started by Naver, the Korean firm behind popular messaging app Line, and it had proven popular in Japan, Korea, China and other markets in Asia thanks to a focus on… Read More

While the world waits for Instagram to launch a location-sharing feature à la Snapchat, it’s worth wondering about the potential arrival of something far more simple and obvious: user-preset filters.
Instagram now allows you to prioritize your favorite filters at the beginning of the list and leave the ones that you don’t use often at the end. However, each user has their own… Read More

Never mind the ‘pics or it didn’t happen’ rule. The new rule is: geofilter or you weren’t there. Here are seven of the most remote geofilters around the world:

Jozani Forest, Zanzibar, Tanzania

This geofilter appears in a forest in the only national park in Zanzibar, on an island off the coast of Tanzania, Africa. The forest also happens to be home to the Zanzibar red colubus monkey — a species that only exists on that island. While you’re snapping monkeys, be sure to search for the forest’s geofilter. Read more…

Not to fret! Whether you consider yourself a power user or not, here are 10 tips to help take your Snapchat game to the next level.

1. Create Snapcode from any website

Snapcodes aren’t just for adding your friends anymore. You can create your own Snapcodes for any website and share them online for other Snapchat users to scan, or if you’re really nuts for them, you can print them up and include them on, say, flyers. Read more…

Norwegian startup Gobi raised $500,000 at a $15 million valuation to take on Snapchat with its “Stories” communication tool. The platform enables users to create public and private groups where users can share photos and videos that stay around for three days before vanishing into digital pixel-dust. Read More

A spokesperson for Snap said the lenses will be live in the app for 24 hours and are meant to celebrate women they represent.

The lens for Kahlo, for example, transforms your face into the artist’s iconic look complete with flower crown, red lipstick and, of course, unibrow. In a statement, the Frida Kahlo Corporation said the lens is meant to “capture the faces of all her followers around the world.” Read more…

Snap, the parent of Snapchat, had a great first two days on the stock market, only to be followed by two terrible ones. Shares quickly tumbled to beneath $22, an over 11% drop in morning trading. This means that most investors are already losing money on the social media company. Snap opened Thursday at $24 per share. It is still above its $17 IPO price, but that’s mainly relevant for… Read More

The more time you spend staring at your smartphone — scrolling through Facebook, trolling on Twitter, snapping on Snapchat — the lonelier you’re prone to feel, researchers say.

A national study on young adults found that frequent use of social media might be associated with increased feelings of isolation. As anyone with FOMO knows, watching other people’s digital lives is an imperfect substitute for real-world interactions.

“We are inherently social creatures, but modern life tends to compartmentalize us instead of bringing us together,” said Brian Primack, the study’s lead author and director of the Center for Research on Media, Technology and Health at the University of Pittsburgh. Read more…

Snapchat priced its IPO at $17 per share on Wednesday, raising $3.4 billion. Then it opened Thursday at $24 per share and closed at $24.48. That’s a 44% gain for the select investors who bought into the IPO. And that gain looks great…for new investors. But it also means that Snapchat could have sold its shares for a higher price! If Snapchat priced its shares just a little higher… Read More

Snap Inc. has been playing with dronesThe New York Times reported Tuesday that the company has worked on building its own drones, citing three people “briefed on the project who asked to remain anonymous because the details are confidential.”

The piece doesn’t get into details, but the premise is intriguing — and not at all surprising for a company that defines itself as a “camera company” in its own mission.

“Snap is a camera company. We feel like we’re really at the beginning of what cameras can do, evolve from being just a piece of hardware to software connected to the internet,” Snap CEO Evan Spiegel said in a 35-minute video released about the company ahead of its initial public offering. Read more…

Snapchat has been having some fun with music on the app. Last month, they helped Ed Sheeran debut 30-seconds of his new song “Shape Of You” via a lens, where users could don blue sunglasses and dance amid fictional disco lights.

But not everyone is playing along. Kate Nash, an English singer-songwriter perhaps best known for the song “Foundations,” accused Snapchat of stealing the rights to that exact song. She broadcasted her accusation on Twitter Friday, posting a video of her using the lens:

The Post, owned by Amazon CEO Jeff Bezos, joins dozens of other media outlets looking for new revenue sources and younger audiences.

The first edition featured an explanatory story on President Donald Trump’s travel ban, an exposé on pizza rat and a (very long) question-and-answer with Trump adviser Kellyanne Conway, among other stories. Read more…

Snap files publicly for its massive IPO, Uber will pause its service in Taiwan starting February 12th, Pokémon GO crosses $1 billion in revenue, Facebook lets you search images by content and Licking County government gets its offices shut down by ransomware. All this on Crunch Report! Read More

Snapchat parent Snap Inc. has finally revealed its long-awaited IPO filing. The social messaging company, which plans to go public in early March, just shared details about its growth trajectory and financials. And while we knew that Snap has raised at least $2.4 billion in capital from a long list of investors, we now know the ownership percentages. We also know the pre-IPO values of… Read More

Snap Inc., the parent company behind Snapchat, just filed for an initial public offering. They’re the first American social media company to file for IPO so since Twitter did more than three years ago.

Snapchat is taking new steps to celebrate Black History Month in its app.

The app is rolling out a set special geofilters and launching a new “Our Story” called “Young Black and Proud,” which encourages Snapchat users to share their experiences and what makes them proud, to commemorate Black History Month.

As with other “Our Stories,” the content will be curated by Snapchat’s editorial team and be live in the app for 24 hours. To go with the Our Story, Snapchat has added a set of Black History Month-themed geolfilters meant to encourage users to talk about their backgrounds and what makes them proud. Read more…

Snap, Inc. is working on an updated version of its in-app Snapchat lenses that would be able to recognize landscapes as well as faces, according to The Information, and intelligently overlay augmented reality animations and objects overtop of scenes captured through your camera. This is different from its existing smart Lenses, which can add features like snowfall to scenes, because it can… Read More

Snap Inc., the mobile app’s parent company, will file for an initial public offering late next week, according to anonymous sources speaking to Kara Swisher of Recode. Given that it’s Swisher, a tech press veteran, we’d categorized them as reliable.

The fact that Snapchat is going public hasn’t been kept a secret. The company secretly made moves, as in quietly filed to the Securities and Exchange Commission, back in November. (Snap was able to secretly file because it made less than $1 billion last year. ) Read more…

Snap — the makers of Snapchat — had confidentially filed for its IPO late last year, but it looks like we’ll be getting a look at the inner guts of the company’s financials and workings as early as late next week. The company will file publicly for its initial public offering late next week, according to a new report from Kara Swisher over at Recode. This is yet… Read More

AppDynamics CEO David Wadhwani and Cisco VP of IoT Rowan Trollope talk to us about the $3.7 billion acquisition, Alpahbet biotech moonshot lands $800 million in funding and a Snapchat Spectacles case melts while charging. All this on Crunch Report. Read More

Snapchat released its redesigned app with universal search capabilities on iOS earlier this week, so I decided to give it a try — you can watch me fumble around in the video above. The search bar functions like, well, a search bar — if you’re looking for another user, group chat or Discover publisher, you just type them in. It also introduces Quick Chat recommendations, so… Read More

Cisco acquires AppDynamics for $3.7 billion, Facebook launches a Snapchat story clone in its app in Ireland, Amazon owns more of its shipping logistics, Apple isnt giving up on India, and Apple hires Dropcam co-founder Greg Duffy. All this on Crunch Report. Read More

Sprint takes a 33% stake in Tidal, The SEC is investigating Yahoo, a study from Cambridge on vaccinating fake news, Apple fixes more MacBook Pro bugs and a big Snapchat redesign hits iOS. All this on Crunch Report. Read More

The company is set to roll out a major redesign of its app in the coming days, Snapchat confirmed Thursday. The new look, which is being previewed to the company’s beta testers on Android now, adds a search bar, new navigation and a global live story that will feature snaps from all over the world.